scholarly journals Integrating Ethical Values into Fraud Triangle Theory in Assessing Employee Fraud: Evidence from the Malaysian Banking Industry

2020 ◽  
Author(s):  
Jamaliah Said ◽  
Md. Mahmudul Alam ◽  
Masitah Ramli ◽  
Marhamah Rafidi
Keyword(s):  
Developing Countries ◽  
Internal Control ◽  
Banking Industry ◽  
Primary Data ◽  
Fraud Triangle ◽  
Ethical Values ◽  
Triangle Theory ◽  
Employee Fraud

This study attempts to integrate ethical values into the fraud triangle theory in the context of Malaysian banking industry. Primary data were collected through the survey of 108 questionnaires administered to the employees of the top three largest banks in Malaysia. The findings revealed that ethical values were negatively related to employee fraud, and two elements of fraud triangle theory, namely, opportunity and rationalization, were positively related to employee fraud. This implies that high ethical value is crucial to mitigate employee fraud. To minimize employee fraud, the banking industry should reduce opportunities and employee negative rationalization through strong internal control. This study contributes to literature on the occurrences of employee fraud, which is not widely discussed, especially in the context of the banking industry in developing countries.

scholarly journals Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

2017 ◽  
Vol 10 (2) ◽  
pp. 170-184 ◽  
Author(s):  
Jamaliah Said ◽  
Md. Mahmudul Alam ◽  
Masitah Ramli ◽  
Marhamah Rafidi
Keyword(s):  
Banking Industry ◽  
Fraud Triangle ◽  
Ethical Values ◽  
Triangle Theory ◽  
Employee Fraud

scholarly journals Integrating Religiosity into Fraud Triangle Theory: Empirical Findings from Enforcement Officers

2019 ◽  
Author(s):  
Jamaliah Said ◽  
Salsabila Asry ◽  
Marhamah Rafidi ◽  
Rawia Rida Obaid ◽  
Md. Mahmudul Alam
Keyword(s):  
Internal Control ◽  
Local Authority ◽  
Fraud Triangle ◽  
Public Officials ◽  
Huge Amount ◽  
New Model ◽  
Fraud Risk ◽  
Financial Pressure ◽  
Triangle Theory ◽  
Employee Fraud

Recently, employee-fraud has drawn extensive attention due to huge amount of losses of various organizations. This study developed a new model of fraud risk by integrating new elements into a fraud triangle theory. This study simultaneously analyzed religiosity and the three elements of fraud risk factors of employee fraud committed by low and mid-level public officials. The data collected from 120 enforcement officers indicated that religiosity is negatively related to employee fraud. By contrast, all the three elements of fraud triangle theory, namely, pressure, opportunity, and rationalization, are positively related to employee fraud. These results imply that strong religiosity is crucial to mitigate employee fraud. To minimize employee fraud, the opportunity to commit such fraud should be reduced through strong internal control, reduction of negative rationalization, and employee financial pressure. This study contributes to the literature by introducing a new model on employee-fraud occurrence that is not extensively discussed, particularly in the context of local authority in developing countries.

scholarly journals Deteksi Kecurangan Laporan Keuangan Dan Upaya Penanganannya Pada Bank Perkreditan Rakyat

InFestasi ◽  
2022 ◽  
Vol 17 (2) ◽  
pp. Inpres
Author(s):  
Bayu Wicaksono ◽  
Bambang Haryadi
Keyword(s):  
Qualitative Research ◽  
Organizational Culture ◽  
Research Methods ◽  
Internal Control ◽  
Primary Data ◽  
Fraud Triangle ◽  
Red Flags ◽  
Financial Reports ◽  
Triangle Theory

Penelitian ini dilakukan dengan tujuan untuk memberikan gambaran dalam mendeteksi kecurangan laporan keuangan dengan memperhatikan gejala-gejala (redflags) kecurangan yang muncul serta dapat menjadi masukan pada saat memberikan kebijakan untuk meminimalisir terjadinya fraud pada Bank Perkreditan Rakyat. Penelitian ini menggunakan pendekatan kualitatif dan teknik analisis data menggunakan deskriptif yang mengungkapkan karakteristik yang ada pada situs penelitian. Informan meliputi pimpinan cabang dan masing-masing penyelia unit yang berkaitan. Hasil penelitian menunjukkan bahwa gejala-gejala potensial yang timbul meliputi adanya tekanan yang berlebih dari pimpinan, ketidakefektifan pelaksanaan monitoring, minimnya pemisahan tugas, ketidakpuasaan terhadap pekerjaan yang dimiliki saat ini, perubahan perilaku dan gaya hidup. Hasil temuan redflags kemudian dikeroleasikan dengan teori segitiga kecurangan dan disimpulkan bahwa faktor peluang merupakan faktor yang paling butuh perhatian khusus. Upaya yang dilakukan untuk meminimalisir terjadinya kecurangan dilakukan dengan 2 cara yakni upaya preventif (menjadikan budaya organisasi yang jujur dan meningkatkan kualitas pengendalian internal) serta melakukan upaya represif (memberikan sanksi sesuai peraturan yang berlaku). This study was conducted with the aim of providing an overview in detecting fraudulent financial reports by paying attention to the fraud red flags symptomps that appear and can be used as input when providing policies to minimize the occurrence of fraud in Rural Banks. Informants include branch leaders and each related unit supervisor. This study uses primary data with descriptive qualitative research methods. The results showed that the potential symptoms that arise include changes in behavior and lifestyle, ineffective monitoring implementation, lack of segregation of duties, dissatisfaction with the current job. The findings of red flags were then correlated with the fraud triangle theory and concluded that the opportunity factor is the factor that most needs special attention. Efforts that is used to minimize the occurrence of fraud were done in 2 ways, preventive efforts such as creating an honest organizational culture and improving the quality of internal control. and the repressive efforts be like giving punishment according to applicable regulations.

Learning Internal Controls from a Fraud Case at Bank of China

2012 ◽  
Vol 27 (4) ◽  
pp. 1171-1192 ◽  
Author(s):  
Huong Ngo Higgins
Keyword(s):  
Internal Control ◽  
Banking Sector ◽  
Business Students ◽  
Internal Controls ◽  
Fraud Triangle ◽  
Bank Of China ◽  
Recent Reform ◽  
Chinese Banks ◽  
Growing Economy ◽  
Triangle Theory

ABSTRACT This case provides an opportunity to discuss principles of internal control, the process by which an entity's board of directors, management, and other personnel provide reasonable assurance that fraud and theft are prevented and detected. The case also facilitates discussion of the unique corporate governance and internal control environments in China, a fast-growing economy. Readers will be asked to apply the fraud triangle theory to identify internal control weaknesses and to design control activities for preventing fraud. The case is intended for beginning auditing students, but is also suitable for a more general audience such as accounting, management, and business students at the M.B.A. or undergraduate level. The case introduces Bank of China (BOC) against the backdrop of China's banking sector. It describes the proliferation of non-performing loans in Chinese banks, the failure to report these loans correctly, and the way in which these conditions create a climate where fraud and theft might be easily hidden. These problems and the need for internal controls become evident in the description of a major fraud scheme at BOC. After relating this scheme, the case concludes by reviewing recent reform initiatives to modernize internal controls in Chinese banks.

The Dark Side of Environmental Sustainability in Projects: Unraveling Greenwashing Behaviors

2021 ◽  
pp. 875697282110427
Author(s):  
Qinghua He ◽  
Zilun Wang ◽  
Ge Wang ◽  
Jianxun Xie ◽  
Zhen Chen
Keyword(s):  
Environmental Sustainability ◽  
Structural Equation ◽  
Qualitative Comparative Analysis ◽  
Dark Side ◽  
Primary Data ◽  
Equation Modeling ◽  
Fraud Triangle ◽  
Positive Effects ◽  
Managerial Implications ◽  
Triangle Theory

Greenwashing behaviors (GWBs) are positive environmental communications in combination with poor environmental performance. Using fraud triangle theory, this study investigated the effects of three types of factors (pressures, opportunities, and rationalizations) that shape contractor GWBs. Primary data from 586 respondents were analyzed using structural equation modeling (SEM) and fuzzy-set qualitative comparative analysis (fsQCA). The SEM results indicate positive effects for these factors with the exception of isomorphic pressures and reveal the mediating role of rationalization. The fsQCA results present three configurational models that trigger GWBs. Theoretical and managerial implications are provided that shed new light on facilitating environmental sustainability in projects.

scholarly journals Pengaruh Pengendalian Internal, Budaya Organisasi, dan Moralitas pada Kecenderungan Kecurangan (Fraud) di LPD se-Kabupaten Gianyar

2018 ◽  
pp. 2155
Author(s):  
I Putu Aditya Prastika Eka Putra ◽  
Made Yenni Latrini
Keyword(s):  
Organizational Culture ◽  
Internal Control ◽  
Random Sampling ◽  
Stratified Random Sampling ◽  
Fraud Triangle ◽  
Cultural Organization ◽  
Analysis Technique ◽  
Linear Regression Technique ◽  
Triangle Theory ◽  
Questionnaire Method

This research aimed to determine the effect of internal control, organizational culture, and morality to fraud tendency. The theory used in this research are Fraud Triangle Theory and Agency Theory. The population in this study is the head of LPDs in Gianyar regency. This research using proportionate stratified random sampling. The samples were taken are 73 head of LPDs. The data collectment is done by questionnaire method. The data analysis technique used in this research is multiple linear regression technique. The results of this research showed that internal control, cultural organization and morality have negative affect on fraud tendency in LPDs in Gianyar regency. Keywords:  Internal Control, Organizational Culture, Morality, Fraud Tendency

scholarly journals Integrating Religiosity into Fraud Triangle Theory: Findings on Malaysian Police Officers

2019 ◽  
Author(s):  
Jamaliah Said ◽  
Md. Mahmudul Alam ◽  
Zulyanti Abdul Karim ◽  
Razana Juhaida Johari
Keyword(s):  
Police Officers ◽  
Police Department ◽  
Primary Data ◽  
Lower Probability ◽  
Fraud Triangle ◽  
Cross Sectional ◽  
Occupational Fraud ◽  
Asset Misappropriation ◽  
Triangle Theory ◽  
Sabah And Sarawak

Purpose – This study aims to conduct an empirical analysis of the factors that determine the occupational fraud behaviour.Design/methodology/approach – This study utilizes primary data collected by a questionnaire based survey on 186 police officials of Malaysia including Sabah and Sarawak. Data is analysed using descriptive statistics, factor analysis, and cross-sectional regression.Findings - The results derived in the study showed a statistically significant positive relationship between three basic variables of the fraud theory – pressure, opportunity, and rationalization with asset misappropriation. Moreover, this study revealed that religiosity is statistically significantly and negatively correlated to asset misappropriation. Therefore, the higher religiosity of an individual correlates with the lower probability involve in asset misappropriation.Practical implications - The findings will help Anti-Corruption Commission, Enforcement Agency of Integrity Commission, Police Department, and relevant agencies from Malaysia and other countries to design policies for reducing cases of fraudulent behaviour.Originality/value – This study is an original work based on the primary data collection.

Analisis Faktor-Faktor Penyebab Fraud Pada Badan Usaha Milik Daerah

2016 ◽  
Vol 3 (2) ◽  
pp. 97-119
Author(s):  
Muhamad Erfin Fatoni ◽  
Abdul Halim
Keyword(s):  
Human Resources ◽  
Control Systems ◽  
Internal Control ◽  
Secondary Data ◽  
Qualitative Approach ◽  
Primary Data ◽  
Fraud Triangle ◽  
Fraud Prevention ◽  
Internal Control System

The purpose of this research is to analyze the factors that cause the occurrence of fraud in PD BPR Bank Dearah X which is one of the regional owned enterprises of Local Government X and identify the steps ways of fraud prevention which is effective in PD BPR Bank Daerah X. This research uses a qualitative approach with a case study. This study uses the primary data and secondary data. This research uses many data collection techniques by conducting an interview, an observation and a documentation. The results show that the factors that cause the occurrence of fraud in PD BPR Bank Daerah X can be classified into four, namely: (1) the pressure that comes from the external and internal influence, (2) an opportunity or a chance due to the weakness of internal control systems owned by BPR , sanctions are not strict enough for the wrongdoers of fraud, and misuse of authority committed by directors, (3) rationalization, and (4) collusion. The ways of fraud prevention which are done by the management of PD BPR Bank Daerah X and based on the results of interviews conducted by the researchers, can be identified as follows: (1) An improvement of the internal control system in PD BPR Bank Daerah X, (2) An implementation of policy of know your employee (KYE) as an effort of fraud prevention by controlling the aspects of human resources (HR); (3) A creation of a special line of fraud reporting policy;and (4) An establishment of policies and sanction procedures. Keywords: Fraud, Regional Owned Enterprises, Fraud Triangle, Anti-fraud Strategy.

scholarly journals Deliberation of Fraud Triangle Theory: A Comparison among Public and Private Commercial Banks of Sindh, Pakistan

2020 ◽  
Vol V (I) ◽  
pp. 336-348
Author(s):  
Vivek Anand ◽  
Muhammad Qasim Nizamani ◽  
Farheen Qasim Nizamani
Keyword(s):  
Internal Control ◽  
Commercial Banks ◽  
Primary Source ◽  
Fraud Triangle ◽  
Public And Private ◽  
Financial Pressure ◽  
Private And Public ◽  
Triangle Theory ◽  
Public Banks ◽  
Public And Private Sector

The research has been conducted to apply the most fundamental concept of fraud triangle theory, introduced by Donald Cressey's in 1950-53, to private and public commercial banks of Sindh, Pakistan. According to this theory, Donald Cressey identified that when three-component/factor i-e pressure, opportunity, and rationalization, comes into an individual's life, he is very likely to commit fraud. Eight different hypotheses are drawn for this study to test the elements of the fraud triangle in public and private sector banks. The study adopted a primary source of data collection, with a sample size of 600 distributed to respondents of the two largest bank of Pakistan, i-e, the National Bank of Pakistan and Habib Bank Limited. The statistical Mann-Whitney U-Test applied to test the hypotheses. The results of the study disclosed that the employees in public sector banks in Sindh, facing more financial pressure, the internal control of public banks is also week; hence fraudsters find more opportunities to commit fraud and the employees working in public banks also behave rationalization for their illicit activities.

Internal controls and fraud – empirical evidence from oil and gas company

2016 ◽  
Vol 23 (4) ◽  
pp. 1154-1168 ◽  
Author(s):  
Khairul Mizan Zakaria ◽  
Anuar Nawawi ◽  
Ahmad Saiful Azlin Puteh Salin
Keyword(s):  
Internal Control ◽  
Oil And Gas ◽  
Direct Access ◽  
Fraud Triangle ◽  
Contributing Factors ◽  
Academic Journal ◽  
Content Type ◽  
Study Approach ◽  
Internal Control Weaknesses ◽  
Triangle Theory

Purpose The purpose of this study is to examine the type of internal control weaknesses and its impact that leads to fraud activities in an oil and gas company, which is rarely found in empirical research. Design/methodology/approach A case study approach was taken to investigate and analyse the fraud incidents to the deepest understanding. A mixed method of data collection, specifically document analysis and interviews, was used. Findings The study found that internal control weaknesses can be major contributing factors for fraud to be committed. Poor supervision and improper documentation process provide opportunity to misappropriate the assets, worst off if it includes several people that cooperate to conduct those illegal malpractices. Research limitations/implications The results provide further confirmation of the fraud triangle theory on the causes of the fraud, i.e. opportunity because of weak internal control. It also validates with many prior studies conducted by global professional firms such as KPMG, PricewaterhouseCoopers and Association of Certified Fraud Examiners on fraud and its related causes and implications. This study, however, was conducted on only one company with limited number of interviews. Practical implications This study provides some recommendations to improve weak internal control, which in turn will reduce opportunities of fraud committed in the company. Originality/value This study is original, as it focuses on a company that operates in the highly specialized industry, i.e. oil and gas, which is rare in fraud literature, particularly in developing markets such as Malaysia. It has examined various documents and reports of employee fraud that are generally difficult to be accessed by researchers to be finally published in an academic journal. The findings of this study are inferred from direct access of company documents that are private and confidential.

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